A controversial plan to tap the state's largest public pension system to help balance the state
budget has been shelved.

Lawmakers said yesterday that they have rejected a proposal from Gov. Ted Strickland to generate
$256 million by reducing the percentage of employee salaries that the state contributes to the
Public Employees Retirement System.

Sen. Keith L. Faber, R-Celina, said the Senate made finding an alternative a top priority
because the plan put retiree health care in jeopardy and could have downgraded Ohio's bond rating,
making it more expensive for the state to borrow money.

"We thought it was irresponsible to go into the state pension plans for the first time ever and
under-fund those intentionally," he said. "Frankly, it was a very shortsighted solution."

The Ohio Retirement Study Council also voted 7-0 yesterday to reject the plan.

But neither Faber nor other lawmakers were willing to say what alternative they found to replace
the $256 million that was being counted on to help fill a $3.2 billion shortfall in the upcoming
two-year budget. Under the rejected pension proposal, the state's contributions would have been
reduced from 14 percent to 8 percent for two years.

Strickland spokeswoman Amanda Wurst would say only that the governor supports finding other
options to his pension proposal.

Critics of the plan, including union leaders allied with Strickland, said it was a bad idea that
would risk the solvency of the pension fund.

Opponents raised a host of other concerns, including whether future legislatures could be
obligated to pay the money back and whether such a plan should be rushed without adequate
study.